Cathie Wood, a longtime backer of Elon Musk, is standing by the Tesla Inc. chief executive after a turbulent start to the week that saw shares in the electric vehicle-maker plunge after the billionaire businessman announced he’s forming a new political party.
The founder of Ark Investment Management LLC pointed instead to what she described as a renewed operational focus after Musk moved to take control of sales in the US and Europe, signaling growing engagement with the company at a critical juncture.
Wood’s continued confidence in Musk is consistent with her long-running bet on Tesla, which has remained a top holding across several Ark funds since 2014.
“One of the announcements Elon made recently is that he is going to oversee sales in the US and in Europe,” Wood said in an interview on Bloomberg Television. “When he puts his mind on something, he usually gets the job done. So I think he’s much less distracted now than he was, let’s say, in the White House 24/7.”
The money manager has been one of Tesla’s biggest bulls in recent years. In March, Wood told Bloomberg that the stock price would hit $2,600 in five years — almost nine times its current price — driven in part by the company’s highly anticipated robotaxi, which she believes will account for 90% of the company’s value over time. Wood is also invested in Musk’s private companies, including SpaceX, Neuralink Corp. and xAI.
“We’ve been dealing with controversy around Elon Musk in one form or another since we first bought the stock,” she said. “We do trust the board and the board’s instincts here and we stay out of politics.”
Tesla shares have slumped 27% this year, falling in eight of the past nine trading sessions. Sales and shipments have dropped precipitously in key markets including Europe and China, as its founder faced political pushback and alienated some car buyers in key markets.
Over the weekend, the Tesla chief executive officer announced he’ll take on Republicans and Democrats with an “America Party,” focusing on House and Senate seats for the coming 12 months. Musk also said backing a candidate for president wouldn’t be out of question.
As for Apple Inc., Wood said she’s waiting to see how the company moves forward, alluding to the recent setback of losing its top executive in charge of artificial intelligence models to Meta Platforms Inc.
“If you think about the ultimate mobile device, it’s an autonomous vehicle and that should have been Apple’s to win,” she said. “It’s the largest AI project on Earth we believe” and losing another talent, she adds, puts Apple in a precarious position. “I think the burden of proof is on them.”
Meta’s Mark Zuckerberg has made AI the company’s top priority as it races to keep up with rivals such as OpenAI and Google and has been heavily involved in recruiting for the company’s AI division.
“We’re trying to figure out if what Mark Zuckerberg is doing today is much like he did when he was pivoting hard to the metaverse because he thought that was the next big thing and, and that was incorrect,” she said. “So, it’ll be interesting to see if he’s able to turn his open-source strategy — and we’ve admired that quite a bit in terms of generative AI — into a leader.”
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